Defendant Name:
Charles Schwab Investment Management
Defendant Type:
Subsidiary of Public Company
Public Company Parent:
Charles Schwab Corporation
SIC Code:
6211
CUSIP:
80851310
Document Reference:
33-9171
Document Details
Legal Case Name
In the Matter of Charles Schwab Investment Management; Charles Schwab & Co., Inc.; and Schwab Investments
Document Name
Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b) and 21C of the Securities Exchange Act of 1934, Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, and Section 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
Document Date
11-Jan-2011
Document Format
Administrative Proceeding
Allegation Type
Investment Advisers/Investment Companies
Document Summary
On January 11, 2011, the SEC instituted settled administrative and cease-and-desist proceedings against Charles Schwab Investment Management ("CSIM"), Charles Schwab & Co., Inc. ("CS&Co."), and Schwab Investments. According to the SEC: "These proceedings arise out of the offer, sale, and management of the Schwab YieldPlus Fund (the 'Fund' or 'YieldPlus Fund'), a fixed-income mutual fund managed by Charles Schwab Investment Management and marketed and distributed by Charles Schwab & Co., Inc., which suffered a significant decline during the credit crisis of 2007-2008. Respondents: (1) offered and sold the Fund as a cash alternative without adequately disclosing the differences between the Fund and the cash investments with which it was compared, which misled investors; (2) deviated from the Fund's concentration policy when it invested more than 25% of Fund assets in non-agency mortgage-backed securities without obtaining a shareholder vote as required by statute; (3) made inaccurate statements concerning the Fund while its NAV declined; and (4) failed to establish and implement internal controls reasonably designed to prevent the misuse of material nonpublic information."
Disgorgement & Penalty Information
Resolutions
Cease and Desist Order
Censured
Compliance Related Independent Consultant
Other Compliance Related Undertaking
Various undertakings
Other Defendants in Action:
